TMI Blog2007 (8) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... business premises of a group of assessees, including the assessee before us, collectively called the Bansal Group. Thereafter, proceedings were initiated against the assessee under section 158BC of the Act. The Assessing Officer made huge additions and these additions were, by and large, confirmed by the Commissioner of Income-tax (Appeals) [CIT(A)]. The Tribunal set aside the orders of the CIT(A) and that is why the revenue is before us. Since the facts of all the cases are more or less similar, they were dealt with by the Tribunal by one order and we do the same. 3. Two issues have been canvassed before us: firstly with regard to unexplained payment of commission and secondly with regard to excess stock of goods found in the searched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Group for which he received a commission. Therefore, the Assessing Officer added back some amounts in the accounts of the assessee. 7. The principal contention urged by the assessee before the Tribunal, and which was accepted, was that during the course of search, no evidence was found of any bogus payments. Under these circumstances, the provisions of Chapter XIV-B of the Act were not at all applicable. The statements of V.P. Jain were post-search statements having no direct nexus with the search and they could not have been relied upon for the purposes of proceedings under section 158BC of the Act. 8. As we understand it, in respect of a block assessment, undisclosed income is required to be computed on the basis of evidence found d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o sections 132 and 132A. (p. 145) 10. Similarly, in CIT v. Elegant Homes (P.) Ltd. (2003) 259 ITR 2322 , the Rajasthan High Court held : . . . In Chapter XIV-B of the Act, special provisions for assessment in search cases have been given and if any amount of income has not been taxed and during the course of search, if some undisclosed income is found on the basis of material seized, that should be treated as undisclosed income as per the scheme of special assessment under the aforesaid Chapter. (p. 235) 11. The view expressed by this Court in Ravi Kant Jain s case (supra) is, of course, binding on us and we have also followed the view expressed by the Rajasthan High Court in Elegant Homes (P.) Ltd. s case (supra). In CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel for the revenue on the statement of V.P. Jain recorded on 25-9-2001. That statement was recorded after the search proceedings and appears to have been recorded only with a view to confirm the correctness of the account books. It is not as if the statement was recorded during the search proceedings nor is it the case of the revenue that because of some incriminating material that was unearthed during the search proceedings that it became necessary to record the statement of V.P. Jain. It cannot, therefore, be said that the statement of V.P. Jain was a direct consequence or result of obtaining some incriminating material which showed that the assessee had undisclosed income. 14. Quite apart from the above, we also find that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have a different weight and it cannot be said with any degree of certainty that the average weight of the goods was 65 kg. per bundle. That the entire exercise was an estimate is confirmed by the CIT(A) who arrived at an average weight at 60 kg. per bundle. Similarly, in respect of the fine wire products, the Assessing Officer took the average weight at 20 kg. per bundle and this was reduced by the CIT(A) to 16 kg. per bundle. This fact is being mentioned only to show that both the Assessing Officer as well as the CIT(A) made a guess with regard to the average weight of each bundle. The Assessing Officer as well as the CIT(A) took into consideration the fact that the employees of the assessee accompanying the search party did not raise any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercising powers conferred upon it under the Act. Mere guess work or an estimate cannot be an adequate substitute for a scientific investigation or carrying out some empirical study. The officers who conducted the search did not want to take the necessary trouble which, of course, would have been time consuming, but the impact of making a guesstimate can be quite damaging insofar as the assessee is concerned. The assessee cannot be made to suffer the consequences of lethargy on the part of the officers of the revenue. 21. Under these circumstances, we are of the opinion that the Tribunal rightly came to the conclusion that the alleged excess stock calculated by the revenue needs to be deleted. It is, of course, not possible today to redet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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